There’s going to be less boom this Diwali. Retailers are seeing a modest growth in sales during the festive season as they gear up to dole out freebies to lure reluctant customers back.
With India’s first-quarter GDP falling to a decade-low of 5.5 %, the demand is muted in various categories and experts say retailers would be lucky if they see a growth of around 10% during the festive season.
This compares to the 14% growth during last year’s festive period.
They say that companies will have to be innovative with their marketing and product line-up if they want to attract customers this season.
?I would expect most retailers to see a 9-10% growth during the festive season, which ideally should have been in the 20% range. This is our estimate,? said Kumar Rajagopalan, CEO of Retailers Association of India.
Retailers have to start rethinking the way in which they have to attract consumers. ? All that we need is for consumers to start feeling confident about spending,? he said.
For the season, retailers have started to introduce freebies and new offers and have increased spends for advertising.
Generally the season, which starts in September with Ganesh Chathurthi extending till January, contributes to about 40% of sales.
This time, it may not contribute more than 20% for some categories, said consultants. ?I am not sure if there is a magic bullet. But this festive season, especially, retailers need to be creative and think of new ways to incite people not only to come into the stores, but also purchase,? said Amitabh Mall, partner and director at the Boston Consulting Group.
Future Group-owned HomeTown that sells products and services for home building and improvement, is looking to capitalise on the festive season by increasing their services, wherein about 90 designers will advise customers and help them renew their rooms, paint walls etc. Said the company’s president Mark Ladham, ?There definitely has been a slowdown in the market over the last few weeks. Over the next few months, we will create a niche by providing services.?
Future Group’s Big Bazaar is running special combo offers on rice, sugar and edible oils, starting from the Ganesh Chaturthi festival in Maharashtra.
Lifestyle chain Pantaloons is offering gift vouchers above purchases of R3000.
While lifestyle and home d?cor stores are aggressively marketing their products, consumer durable firms are expecting smaller items like mobile phone and tablets to do well.
